The price of gold is increasing after hitting four-week lows of $1,860. However, according to TD Securities economists, buyers lack confidence.
Prices for gold are still too high.
"Shanghai Gold dealer liquidations continue to point to the possibility that the massive Chinese buying activity over the past few months was probably made worse by Lunar New Year celebrations in the context of China's reopening, but is now on track to normalise. Even so, the rate of liquidations from this group may reduce given that positioning is currently significantly below normal. In the current setting, this makes investors the only significant buyer or seller, which sharpens the market's attention on forthcoming data.
"Until prices break the $1,840 region, we don't anticipate significant downside flow from CTAs, but beyond $1,900, the margin of safety against a marginal purchasing programme is razor-thin. While prices are still overbought, we do not see an impending negative flow in the absence of data supporting a more hawkish course of action.
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